Credit Card Companies Harvest Cadaverous Credit Card Customers...

[Blackhatjack]

The tv and radio ads that the credit card companies are running are scandalous. The ads portray a cash strapped cardholder giving her story of how she contacted the Credit Card Company, and felt like she had a friend. The ad voice over says the Credit Card Companies 'are here to help.'

Right. Here's what is really going on ......

Warnings of the coming credit card credit crunch could not be more accurate.

And the Credit Card Companies are doing their part to make sure it happens.

While their issuers are taking billions in taxpayer $$, they are busy raising purchasing rates and default rates while reducing available credit lines to the point that default is inevitable.

When a customer is 'on line' --or making payments on time and rolling over a large balance monthly with all the interest and attendant fees -- credit card companies usually view that credit card customer as a profitable customer, and in the past credit card companies would poach such customers from each other by making low or no interest offers for a limited time to encourage them to open an account and transfer their balances.

However, the credit card companies have been 'peeking' at the debt obligations of their credit card holders and determined that a large percentage will be unable to continue servicing their credit card debt, even though they never missed a payment, so it is time to 'harvest' those customers --or in other words, subject them to the most onerous terms possible to extract the maximum amount of $$ from the cardholder as quickly as possible before they crash.

Why? Because a bankrupt cardholder's debt is unsecured, and that usually means there won't be any funds left to pay the credit card company after the secured creditors and administrative fees are paid to the Bankruptcy Court.

And once the credit card holder has been 'bled dry' financially, they will have no further need of them --except to hope that they will continue to pay taxes so that they can borrow even more billions of $$ of taxpayer money.

[truthrocks]

1. Great analysis, thank you . . .

Any suggestions re: what consumers can actually DO to stem the tide of continued usury rip-offs?

:mad:

[Blackhatjack]

3. The relief needed can only come through legislation passed by Congress ...

IF you will recall over the last 8 years the mantra coming from Washington was these industries can best regulate themselves and we should take a hands off approach to any kind of regulation that would impede the free market.

Bush didn't quite make it out of town before the whole barn burned to the ground....

But there has to regulation that reinstitutes usury as a crime, and regulates the powerful financial services.

[KharmaTrain]

2. Repeal The 2005 Bankruptcy Sell Out NOW!

This isn't "harvesting", this is predatory. The debtor has little redress and even if they have made payments are seeing their rates hiked just because they "could be" a liability. Bottom line is the banks are soaking anyone and everyone they can right now to prop up their cash-starved bottom lines. It's a win-win...either you pay the higher rates, or they'll claim you as a deadbeat and collect money from Club Fed...either way they can't lose.

Unfortunately there are many who are caught in this new form of economic servitude. Even in the good times, a person paying the minimum on their cards was playing Russian Roulette...the longer they played, the deeper they'd get. Consolidation loans did little to help as it was a race to try to pay off as much as one could before higher rates kicked in and the downward slide began anew. This credit bomb has long been ticking as, your post so properly states, credit card companies saw deliquent accounts as a revenue source and those who paid on time as the "deadbeats".

If this country is to clean up its act, repealing the regressive 2005 bankruptcy bill should be on the fast track. Caps must be set on interest rates if the middle class is to ever have a chance to recover.